If we assume a 2% inflation rate going forward, that's only ~$600,000 in today's dollars. Seems like a relatively low bar, no?
I retired early years ago. It isn't the annual budget that one has to plan for, but the unforeseen expenses. I took care of my mom and dad for a while. He had top notch medical insurance, but no one covers mental health problems. The total for 4 years of that was just into 7 figures.
Also how about that medical insurance for yourself and your family? Unless people plan on dying young, medical insurance is a huge expense. And that's just insurance, which doesn't cover all eventualities. Ambulance ride? Not covered. A quick whistle to the ER can leave you $50k lighter without trying hard. And then there's the piles of medications, many of which aren't covered.
My friend's grandmother got upper and lower dentures. $40k. Dentures, mind you, not implants.
Also, there's the every increasing cost of everything. Houses, cars, food, all types of insurance are seeing vast annual increases.
$3 million total for a retirement is a bit of a laugh, unless that person plans on keeling over at 65.
$3M for retirement right now is plenty, but you have to live like an actually middle class person.
But if you're wanting to retire early, it's a huge gamble on medical expenses in the US.
They'll need the equivalent of today's $3 million in inflation-adjusted dollars for the time they retire.
What you're saying amounts to a Zimbabwean being able to retire with his lunch money AFTER the country got 1000x inflation and everybody had trillions in their pockets just to get some food for the day - based on the purchasing power of that amount before the inflation.
Are you suggesting that they actually need ~$21 million for a 20 year retirement?
I do believe that would be 30k per year.
I assume you mean $30k per year. The recommended is more like $700,000, and that factors in your pension, but we're just using approximate figures here. Still, $30k per day today is quite doable for a retiree. What are you going to spend your money on, exactly? You've already purchased everything you need by that point in life, so you're just in maintenance mode.
Gen Z isn't 60 years old today. They don't have 600k, and for them, it is a high bar.
https://fortune.com/recommends/banking/57-percent-of-america...
The median American can afford to save considerable money but they tend to spend it on lifestyle flexes instead.
And certainly some people never did manage to save $600,000 over the past 40 years, but it remains that the bar does not seem that high. Even the lowest bar will not be met by some people, but that doesn't mean the bar is high.
In any case, if you want the categories separated, here you are:
In 2019, about half of American households had no savings in retirement accounts, according to the Survey of Consumer Finances (SCF). These accounts include individual retirement accounts; Keogh accounts; certain employer-sponsored accounts, such as 401(k), 403(b), thrift savings accounts; and pensions.
We're looking at those who have 20 years left, not those who could have 60 years left. Naturally one could avoid saving anything for 39 years and then plop down a $600,000 lump sum in the final second and you would be in the exact same place as someone who slowly amassed $600,000 over the span of 40 years, so half of the population having nothing saved doesn't tell us anything.
Bringing us back to the actual topic: Of those who have 20 years left, how much do they have saved?
Sure, they could for example win the Powerball.
A higher inflation rate also raises the goalpost money you need since life will be more expensive than predicted.
Note the catch "for a 20-year retirement". So if you think you might live to be 85, you get to retire at 65.
If you want to retire early, you need more decades of runway thus a lot more cash saved.